A Roth IRA provides tax-free withdrawals, provided you’ve had the account at least five years and you’re at least 59½.
A Roth’s income limits may have kept you from contributing. However, you can convert your traditional IRA to a Roth. It’s not hard to do, but there’s a catch — you’ll have to pay taxes on the pre-tax dollars you convert.
To help avoid a big tax bill, you might want to make the conversion during a year in which your total income is down. Another good time to convert might be when the financial markets are down. Since the value of the investments in your traditional IRA will have dropped, your conversion will generate less in taxes.
Also, you could spread the conversion over several years, reducing the tax bite in any given year. See your tax advisor before making a conversion.
This content was provided by Edward Jones for use by Maggie Schoepski, your Edward Jones financial advisor at 507-867-1460. Member SIPC.
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